2020/05/21 by Anton Pichler, Pichler, Anton, Marco Pangallo +7 · 1 citation
Economics, Econometrics and Finance · Health Professions · Mathematics · #COVID-19 Pandemic Impacts #COVID-19 epidemiological studies #Employment and Welfare Studies #FOS: Economics and business #FOS: Physical sciences #General Economics (econ.GN) #Physics and Society (physics.soc-ph)
paper · pdf · doi:10.48550/arxiv.2005.10585
openalex publication_date 2020/05/21 · openalex created_date 2022/07/26 · openalex updated_date 2026/07/28
We analyse the economics and epidemiology of different scenarios for a phased\nrestart of the UK economy. Our economic model is designed to address the unique\nfeatures of the COVID-19 pandemic. Social distancing measures affect both\nsupply and demand, and input-output constraints play a key role in restricting\neconomic output. Standard models for production functions are not adequate to\nmodel the short-term effects of lockdown. A survey of industry analysts\nconducted by IHS Markit allows us to evaluate which inputs for each industry\nare absolutely necessary for production over a two month period. Our model also\nincludes inventory dynamics and feedback between unemployment and consumption.\nWe demonstrate that economic outcomes are very sensitive to the choice of\nproduction function, show how supply constraints cause strong network effects,\nand find some counter-intuitive effects, such as that reopening only a few\nindustries can actually lower aggregate output. Occupation-specific data and\ncontact surveys allow us to estimate how different industries affect the\ntransmission rate of the disease. We investigate six different re-opening\nscenarios, presenting our best estimates for the increase in R0 and the\nincrease in GDP. Our results suggest that there is a reasonable compromise that\nyields a relatively small increase in R0 and delivers a substantial boost in\neconomic output. This corresponds to a situation in which all non-consumer\nfacing industries reopen, schools are open only for workers who need childcare,\nand everyone who can work from home continues to work from home.\n